Latest SoCalEd plan 'unacceptable'

Time running out for utility recovery efforts

NEW YORK (CBS.MW) -- The latest form of the plan aimed at helping Edison International's utility unit return to solvency is "unacceptable," California Governor Gray Davis said Friday.

The Senate could craft an alternative to the original plan passed by the Assembly last week, but that would leave little time for full passage of it since the legislature ends its current session Friday evening.

Passage of a bill that helps the utility return to solvency is crucial. Southern California Edison's bank credit line forbearance agreements were scheduled to end Saturday, but have been extended by two weeks following the terrorist attacks on the East Coast to "give banks time to consider the matter when everyone is able to function more normally," Ted Craver, Jr., Edison's CFO said during a late Friday conference call.

Still, Davis said the latest plan, as currently written by the Senate, won't make SoCalEd creditworthy.

"The whole purpose of this exercise is to allow Edison to become creditworthy, allowing the state to get out of the power buying business. This bill fails to do this and is unacceptable."

Craver agreed with Davis' comments Friday, emphasizing that time is of the essence. "We're certainly running out of time," Craver said. "I think we're really down to literally the last few minutes."

The Assembly bill had included a five-year option for the state to buy the transmission lines of Edison's
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utility unit, Southern California Edison, for about $2.4 billion, or twice book value. It also would allow Edison to issue $2.9 billion in revenue bonds to pay off debts that the unit racked up on the wholesale electricity market, paying for power at a cost it couldn't recover under state-capped retail rates.

But the Senate has made changes to the bill that reportedly include state purchase of the transmission lines at only book value instead of twice book value, and the bond allowance could change to $2.5 from $2.9 billion, said Dana O'Donnell, deputy press secretary for Assembly Republican caucus leader Dave Cox, R-Fair Oaks.

Proceeds from the much-anticipated bond sale will be used to buy power over the next year and to help pay off huge power purchases made by the state since January, when PG&E Corp.'s
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Pacific Gas & Electric unit and Edison International's Southern California Edison ran out of credit.

"These amendments just about bring the bill back to what it was when it left their (the Senate's) house," she said. "Time is running out and the Senate literally dumped another version of the MOU (Memorandum of Understanding) on us," she added, noting that the Assembly won't be allowed to amend the bill if the Speaker chooses to take the bill up on the floor.

Casey's General Stores to issue refunds

Casey's General Stores said Friday that it will issue refunds to customers who may have paid higher prices for gasoline at its stores following the tragedies at the World Trade Center in New York and at the Pentagon near Washington D.C. on Tuesday.

Illinois had filed a civil lawsuit late Wednesday against Iowa-based Casey's General Store
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alleging gasoline price gouging in several of its stations within the state amid consumer fears of shortages following the terrorist attacks.

Casey's chair Don Lamberti said the company "was founded on the principles of setting guidelines at the corporate level, giving our employees the power to make decisions at the local level, and encouraging the local market to set the price of gasoline." He admitted however, that in the case of Tuesday's devastation, "this system simply didn't work."

There were several reports gasoline price gouging on Tuesday and Wednesday in the wake of the attacks. In Oklahoma, Mississippi and Michigan Tuesday, there were reports of gasoline prices as high as $5 a gallon. See related story.

October crude soars to near $30 on Access

October crude rallied to a high near $30 a barrel Friday in Access trading on the New York Mercantile Exchange, as trading of the futures contracts opened for the first time since Tuesday morning.

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